ABSTRACT
This chapter discusses the issue of income distribution and its connection to other economic outcomes. Economists distinguish between the personal or size distribution of income, which examines income distribution across individuals or households, and the functional or factor share distribution of income, which examines income distribution among factors of production such as land, labor and capital. The chapter reviews the different measures of inequality based on consumption, income and wealth, and their implications, and addresses the issue of horizontal inequality. It provides a profile of the inequality situation in Sub-Saharan Africa, both across countries and over time, using primarily the Gini coefficient as a measure of income inequality. The issue of gender inequality and its relationship to income inequality and development was also discussed. The chapter examines the theoretical and empirical bi-directional relationships between income inequality, economic growth and poverty. The relationship between growth and inequality proposed by S. Kuznets has generated a lot of debate and empirical scrutiny.
